We all know that what startups are and how to invest in it, but are there any risks involved and what are the rewards of investing in them?
There are risks involved in investing in a startup but in the world of finance we know that risk in always proportionate to rewards and with great risk come greater rewards but only when you know where to invest and when. It is very important to assess the risks carefully and in accordance to that one should plan an investment in the startups.
Let’s start by analyzing the risks of investing by talking about the disadvantages involved.
There are some reasons of failure for the startup that are uncontrollable in nature resulting in the downside for everyone. Some of them could be the customer behaviors and likings, government policies & competition that suddenly changes which could result in disaster for the company. Financials need to be rigorously evaluated.
Founder’s profile, experience & background also plays an important role in company’s success that needs our consideration.
Investing in a startup can be risky and it is incredibly wise to know the cons as well before investing your money and time into any startup.
Let’s now look at the rewards of investing in a startup.
- By investing in startup, the investor gets more option as compared to any listed companies where the investor can only put their money in shares.
- You can invest in a warrant that specifies how you’ll invest in the startup and at what time so that ways even if the startup fails in the initial level your money will be safe.
- Most of the startups do not require a lot of funds in the initial stage which means you could not need large sums to control a significant portion.
- There is a great potential for growth and profits for startups with unique idea.
- The returns could be remarkably high if the startup you invest in, does very well.
- If the small business you invest in is bought at a lucrative price, you will get the good returns on your investment.
Now the question arises where you as an investor can find a platform to get the best startups to invest in. We at Startup Angels Network provide you the platform. Here you not only get to invest and grow but opportunities for networking & meeting with other experienced investors as well.